ECB Executive Council Member Schnabel, speaking at a conference in Stockholm, stated that interest rates should continue to rise until inflation reaches the 2 percent target in the medium term.
Schnabel, who spoke at a panel organized by the Swiss National Bank and stated that inflation will not decrease on its own, stated that financial conditions should be tightened.
Schnabel also opposed the criticism that high borrowing costs would slow down Europe’s green transition, saying, “Rising credit costs will make renewable power and green technology financing more valuable, but it would be wrong to think of high interest rates as a scapegoat for delaying the green transition.”
Although Euro Zone inflation has declined from peak levels in recent months, ECB officials state that tight monetary policy should continue in order to reduce inflation.
